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Insight Center: Publications

Clinical Diagnosis of FDA's Clinical Investigation Exclusivity Standard? Unreasonable

Client Alert

Author: N. Nicole Stakleff

Clinical Diagnosis of FDA's Clinical Investigation Exclusivity Standard? Unreasonable

For drug innovators, particularly those focusing on repurposing drugs for new indications and developing drugs that are not considered new chemical entities, understanding the scope of the clinical investigation exclusivity is critical to determining the period of market exclusivity that a drug may enjoy. Innovators relying on the FDA’s determination of the scope of clinical investigation exclusivity often have to take a wait-and-see approach as to whether the “conditions of approval” of their innovative drug will be sufficient to bar approval of a second-comer. Recently, a district court determined that the FDA had been unreasonable in how it made such a determination, and implored the FDA to articulate a standard for determining the “conditions of approval” that delineates the subsequent products that may be blocked and to consistently apply the articulated standard. The U.S. District Court for the District of Columbia held that the FDA had not reasonably interpreted the clinical investigation exclusivity statute when the FDA determined that Brixadi™ Monthly could not be finally approved until the three-year clinical investigation exclusivity expires for Sublocade™ and remanded the case to the FDA to reconsider the application for approval of Brixadi Monthly and articulate a clear standard, consistent with its own precedent, for its final decision.1

Clinical Investigation Exclusivity

Clinical investigation exclusivity is a three-year period of marketing exclusivity awarded to a drug containing previously approved active moiety2 when new clinical investigations3 were conducted by a sponsor that were essential to the approval of the drug.4 It is often awarded for the development of a new dosage form, a new route of administration or a new indication. If a first-approved drug is awarded such clinical investigation exclusivity, the FDA may not approve an application for the “same conditions of approval” of a drug containing the same active moiety before the expiration of three years from the date of approval of the first-approved drug.5

In full, the relevant portion of the statue reads:

If an application submitted under subsection (b) for a drug, which includes an active ingredient (including any ester or salt of the active ingredient) that has been approved in another application approved under subsection (b), is approved after September 24, 1984, and if such application contains reports of new clinical investigations (other than bioavailability studies) essential to the approval of the application and conducted or sponsored by the applicant, the Secretary may not make the approval of an application submitted under subsection (b) for the conditions of approval of such drug in the approved subsection (b) application effective before the expiration of three years from the date of the approval of the application under subsection (b) if the investigations described in clause (A) of subsection (b)(l) and relied upon by the applicant for approval of the application were not conducted by or for the applicant and if the applicant has not obtained a right of reference or use from the person by or for whom the investigations were conducted.6

The italicized portion of the statute is referred to as the “eligibility clause” and the underlined portion as the “bar clause.” The key language in the bar clause — “conditions of approval” — is not defined in the statute or FDA regulations. This portion of the statute was the centerpiece of the Braeburn decision.

Brief Summary of History and Relevant Facts for Braeburn Decision

Numerous drugs containing buprenorphine have been approved by the FDA to treat opioid use disorder (OUD), and the FDA has encouraged pharmaceutical companies to develop drug products that will decrease the risk of abuse, misuse and overdose. Multiple drug innovators have answered the call. In May 2016, the FDA approved Probuphine®, which is a six-month subdermal implant containing buprenorphine for the maintenance treatment of opioid dependence in patients who have achieved and sustained prolonged clinical stability on low-to-moderate doses of a transmucosal buprenorphine-containing product.7

On November 30, 2017, the FDA approved Sublocade™, which is a 28-day subcutaneous injectable depot of buprenorphine for the treatment of moderate-to-severe OUD in patients who have initiated treatment with a transmucosal buprenorphine-containing product, followed by dose adjustment for a minimum of seven days.8 Two new clinical investigations were essential to Sublocade’s approval: (i) a study testing the efficacy of Sublocade’s inhibition of the subjective effects of opioid use and (ii) a study testing the efficacy, safety and tolerability of multiple Sublocade injections over a 24-week period.

On December 21, 2018, the FDA tentatively approved Brixadi™ Monthly, which is a 28-day subcutaneous injectable depot of buprenorphine for the treatment of moderate-to-severe OUD in adults.9 The approval was not final because the FDA found that it was barred by Sublocade’s unexpired three-year new clinical investigation exclusivity also directed to a 28-day injectable depot. The FDA stated that it interprets the operative language in the bar clause — “for the conditions of approval” — to mean that the FDA may not approve any application under section 355(b) for a drug product that shares the exclusivity-eligible drug’s “innovation represented by its approved drug product that is supported by new clinical investigations essential to approval. . . . But does not extend beyond the scope of the approval and does not cover aspects of the drug product for which new clinical investigations were not essential.”10 The FDA reasoned that the clinical studies essential to Sublocade’s approval demonstrated only that a monthly depot would be effective and only to treat moderate-to-severe OUD, and therefore Sublocade’s innovation, and exclusivity, extended only to “the dosing interval provided by the monthly depot product that delivered an appropriate amount of buprenorphine over a one-month period to treat moderate to severe OUD.”11 Sublocade blocked Brixadi Monthly because both are a monthly depot buprenorphine product to treat moderate-to-severe OUD.12 Braeburn Inc., Brixadi Monthly’s sponsor, instituted an action against the FDA, alleging that the FDA’s exclusivity decision on Sublocade violated the Administrative Procedure Act (APA) and Indivior Inc., Sublocade’s sponsor, intervened.

The District Court Decision

Under the APA, a court will set aside the decision of an agency if it finds that the decision was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law.”13 Under Chevron, the court makes a two-part inquiry: (i) has Congress directly spoken to the precise questions at issue or is there more than one reasonable interpretation of the statute and (ii) is the agency’s interpretation a permissible construction of the statute with a reasoned explanation provided by the agency?14

Braeburn argued that the FDA’s determination that Sublocade’s three-year exclusivity blocked approval of Brixadi Monthly was directly contrary to the plain language of the governing statute and was arbitrary and capricious due to its internal inconsistencies in the decision itself and departure from the FDA’s precedent.

Under the first inquiry of Chevron, the court found that “conditions of approval” is an undefined term in the governing statute and susceptible to multiple, reasonable interpretations.15 The FDA reasoned that the conditions of approval could mean anything from (i) all restrictions on a drug’s legally prescribed use, as described on the product’s label; (ii) the conditions under which the FDA approved the drug for use, as set forth in the “Indications and Usage” section of the product’s label; (iii) the “particular circumstances that the FDA finds relevant to its determination that a drug should be approved for marketing,” which depends on the investigations showing that the drug is safe and effective; or (iv) specific characteristics of the drug that warranted exclusivity in the first instance (such as the novel indications or patient populations for which the drug product may be used).16

Turning to the second inquiry of Chevron, the court found that the FDA’s interpretation of “conditions of approval” as the “innovations” that are supported by the first product’s new clinical investigations that were essential to approval is equally ambiguous and, therefore, unreasonable. While agreeing with the FDA that defining “the conditions of approval” as “the features of the drug that the clinical investigations essential to approval showed, for the first time, to be safe and effective — in other words, a drug’s innovative features — respects the relationship between § 355(c)(3)(E)(iii)’s complementary clauses, Congress’s intent, and is a first step toward filling the statutory ambiguity,” the lack of a standard to determine what is an innovation is unreasonable. As such, the court held that the FDA’s decision was to be vacated and remanded back to the FDA.

In the alternative, the court also found that the FDA’s application of its statutory interpretation was arbitrary and capricious because it was inconsistent with previous FDA decisions on buprenorphine products and other products. The court noted that the FDA defined Probuphine’s three-year clinical investigation exclusivity in terms of its dosage form, dosing regimen, indication and patient population, which were not shared by either Sublocade or Brixadi Monthly and resulting in the FDA’s determination that Probuphine’s exclusivity did not bar their approval. Looking to the FDA’s own precedent, the court noted that the FDA defined Astragraf XL’s exclusivity in terms of its dosage form, dosing regimen, indication and patient population, which were shared by Envarsus XR, but not Envarsus XR as it related to a different patient population.

The court vacated the FDA’s decision that Sublocade’s exclusivity barred the approval of Brixadi Monthly and remanded to the FDA “to reconsider, with deliberate speed,” Braeburn’s application for approval of Brixadi Monthly. However, the court did caution that the FDA’s subsequent determination may end in the same result. For the court, the key issue appears to be the lack of a standard for determining the “innovation” that delineates the subsequent products that may be blocked and consistent application of such a standard.


The crux of the FDA’s argument was that the “conditions of approval” is interpreted as encompassing a drug’s innovation, which can only be defined by looking at the previously approved drugs with the same active moiety.17 In this particular case, the FDA noted that Sublocade was the first once-monthly injectable buprenorphine product for the treatment of OUD and its application was based on new clinical investigations demonstrating the safety and efficacy of the monthly depot preparation — simply stated, the dosing interval.18 And that one-month dosing interval was shared by Brixadi Monthly, and therefore was blocked by Sublocade’s exclusivity. The FDA cautioned that if clinical investigation exclusivity was interpreted narrowly, such that any differences between two products that contain the same active moiety would allow the subsequent product to be approved, then the exclusivity would only be applicable to true generics, which was clearly not the intent of Congress.19

On the other hand, Braeburn emphasized and the court appears to agree that the scope of clinical investigation exclusivity should be tied to the particular patient population studied in the new clinical investigations.20 Braeburn focused on the fact that Sublocade required a titration period for patients who were not already on a stable dosage of transmucosal buprenorphine and pointed to the FDA’s description of Probuphine’s exclusivity and its own precedent, each of which references the patient population. While both Indivior and the FDA point out that all of the products — Sublocade, Brixadi Weekly and Brixadi Monthly — require a titration period with a buprenorphine-containing product before receiving the extended release preparations to avoid withdrawal symptoms (not for efficacy),21 the court did not seem to be persuaded — or at least underscored the importance of articulating the standard and applying it consistently.

What remains to be seen is whether the FDA will define a standard that is limited only to determining the scope of Sublocade’s clinical investigation exclusivity as it relates to Brixadi Monthly or just to buprenorphine-containing products, or if the FDA will articulate a standard that will apply to all products containing a previously approved active moiety. It would not be the first time that the FDA has taken the position that a district court’s decision was wrong and limits the impact of the decision to the specific case at hand. For example, the FDA overtly limited the impact of a district court’s decision relating to the application of orphan drug exclusivity to the decision at hand.22

Creation of a clearly defined standard for defining the scope of clinical investigation exclusivity is a double-edged sword. On the one hand, drug innovators may have more insight into the scope of their anticipated exclusivity and will be able to identify, with more certainty, the potential competitors this exclusivity will bar. However, the same clarity and certainty will also elucidate the potential competitors that a drug innovator’s exclusivity will not bar. In this sense, ambiguity can benefit a drug innovator, as it may dissuade third parties from developing a similar product over concern of being blocked and may provide an opportunity to convince the FDA that the scope of exclusivity awarded should be construed broadly to block a future competitor. The purpose of the three-year clinical investigation exclusivity is to incentivize the development of new drugs — albeit in the form of a new indication, new route of administration or new dosage forms, etc., while still enabling the approval of lower-cost generic copies or competitive therapies. Such a delicate balance would seem to require an equally delicate touch in defining the standards of the “innovation” or “conditions of use” that give rise to an award of exclusivity and its application to subsequent drug approvals.


1 Braeburn Inc. v. U.S. Food & Drug Admin., No.19-cv-982 (D.D.C. July 22, 2019).

2 21 C.F.R. § 314.108(b)(4)(iii). The active moiety “is the molecule or ion, excluding those appended portions of the molecule that cause the drug to be an ester, salt (including a salt with hydrogen or coordination bonds), or other noncovalent derivative (such as a complex, chelate, or clathrate) of the molecule, responsible for the physiological or pharmacological action of the drug substance.” 21 C.F.R. § 314.3(b)

3 21 C.F.R. § 314.108(a). New clinical investigation means “an investigation in humans the results of which have not been relied on by FDA to demonstrate substantial evidence of effectiveness of a previously approved drug product for any indication or of safety for a new patient population and do not duplicate the results of another investigation that was relied on by the agency to demonstrate the effectiveness or safety in a new patient population of a previously approved drug product. For purposes of this section, data from a clinical investigation previously submitted for use in the comprehensive evaluation of the safety of a drug product but not to support the effectiveness of the drug product would be considered new.”

4 21 U.S.C. § 355 (c)(3 )(E)(iii) and 21 C.F.R. § 314.108.

5 Id.

6 21 U.S.C. § 355 (c)(3 )(E)(iii) (italics and underlining added).

7 See Prescribing Information for Probuphine® (buprenorphine).

8 See Prescribing Information for Sublocade™ (buprenorphine extended release).

9 The FDA also tentatively approved a Brixadi Weekly, which is a seven-day subcutaneous injectable depot of buprenorphine for the treatment of moderate-to-severe OUD in adults. The tentative approval was only subject to the sponsor’s submission of appropriate labeling (not subject to the expiration of Sublocade’s three-year clinical investigation exclusivity). Brixadi Weekly is not discussed herein.

10 Braeburn, No.19-cv-982, slip op. at 14.

11 Id. at 15. The FDA found that Sublocade’s exclusivity was not “constrained by the use of the specific treatment initiation or dose adjustment schedule, or to the strengths for which it is approved” because the drug’s ability to deliver the right amount of buprenorphine through a monthly depot “is not necessarily limited to or dependent on the particular treatment initiation, dose adjustment schedule, or strengths.” Id.

12 Id.

13 Id. at 17 (citing 5 U.S.C. § 706(2)(A)).

14 Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984).

15 Braeburn, No.19-cv-982, slip op. at 27, 31.

16 Id. at 28-33.

17 FDA’s Memorandum in Opposition, at 22-23 (June 3, 2019).

18 Id.

19 Id. at 25.

20 Braeburn’s Memorandum in Support of Summary Judgment, at 11-17 (May 13, 2019).

21 FDA’s Memorandum in Opposition at 28.

22 Cf. Eagle Pharm. v.  Azar, No. 16-cv-790. Slip op. at 5 (D.D.C. June 8, 2018) (citing FDA’s Policy on Orphan-Drug Exclusivity; Clarification, 79 Fed. Reg. 76,888 (Dec. 23, 2014) where it announced that it would continue to apply its regulations on Orphan Drug Exclusivity as written despite a contrary holding in Depomed, Inc. v. U.S. Dep’t of Health & Human Servs., 66 F. Supp. 3d 217, 226 (D.D.C. 2014) (holding FDA’s conditioning of exclusivity on “clinical superiority” at the marketing approval stage to be improper under the pre-2017 ODA, and that a grant of exclusivity was required following approval of a designated orphan drug)).

Nicole Stakleff is a partner in Pepper Hamilton's Health Sciences Department, a team of 110 attorneys who collaborate across disciplines to solve complex legal challenges confronting clients throughout the health sciences spectrum.

The material in this publication was created as of the date set forth above and is based on laws, court decisions, administrative rulings and congressional materials that existed at that time, and should not be construed as legal advice or legal opinions on specific facts. The information in this publication is not intended to create, and the transmission and receipt of it does not constitute, a lawyer-client relationship.

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